Industries with the Highest Labor Costs in Australia in 2025

1. Health Services in Australia

Labor Costs for 2025: $120.3B

The Health Services subdivision covers a range of health services and facilities. General hospitals are the subdivision's largest revenue driver, accounting for over half of Australia's health services revenue. General practitioners (GPs), clinical specialists and dentists also represent significant revenue streams for the subdivision. While Australia's growing and ageing population has bolstered demand for health services in recent years, the COVID-19 pandemic disrupted subdivision expansion, as health services redirected resources to contain the virus.

Overall, subdivision revenue is expected to edge up by an annualised 1.2% over the five years to 2023-24 to $202.4 billion. This soft growth rate reflects the... Learn More

2. Professional Services in Australia

Labor Costs for 2025: $96.7B

The Professional Services subdivision provides various professional, scientific and technical services to a range of markets. The subdivision's performance is largely linked to overall economic conditions, which often determine business confidence and capital expenditure. Over the past five years, greater business profit, rising capital expenditure by the public sector and mostly positive business confidence have supported subdivision demand. However, the COVID-19 pandemic has disrupted several industries in the Professional Services subdivision, weighing on its performance. In particular, demand for architectural services, and surveying and mapping services fell over the years following the COVID-19 pandemic, as many construction projects were delayed... Learn More

3. Public General Hospitals in Australia

Labor Costs for 2025: $62.5B

Growth in the Public General Hospitals industry has been supported in part by increased government funding. Public hospitals are primarily funded through federal and state governments, with private health insurance and other non-public revenue sources expected to account for less than 10% of industry funding in 2023-24. Public hospital services funding under the National Health Reform Agreement is expected to reach $28.5 billion in 2023-24, having steadily risen over the past decade. There has been a simultaneous expansion in the need for public general hospitals, driven by Australia's ageing population and the rising incidence of chronic illness among adults.

At the... Learn More

4. Finance in Australia

Labor Costs for 2025: $44.0B

The Finance sector's operating environment has characterised by record low interest rates and market turbulence over most of the past five years. A strong residential property market supported by housing price growth and high numbers of house transfers have supported the incomes of many lenders. Yet, volatile business confidence and inflationary pressures have limited growth in capital expenditure from the private sector and overall demand from commercial clients. Competition from neobanks and other fintech disruptors has spurred some larger financial firms to invest in new capabilities in the online space. Overall, sector revenue is expected to decline at an... Learn More

5. Government Schools in Australia

Labor Costs for 2025: $39.8B

The Government Schools industry has experienced modest revenue growth over the past few years. Ongoing population growth, including an expansion of the population aged between 5 and 18, has fuelled demand for public schools and kept revenue on the rise. Government funding has also been stable for government school; state and territory government funding makes up most funding for public schools, alongside some Federal Government funding. Donations and fundraising activities account for the remainder. Long-term climbs in household discretionary incomes have facilitated more donations from the community; however, the trend has also prompted a shift towards private education. Many parents... Learn More

6. Computer System Design Services in Australia

Labor Costs for 2025: $35.0B

The Computer System Design Services industry consists of many businesses that develop and implement information technology services, programming systems and business solutions. Despite the havoc caused by COVID-19 pandemic, the industry has expanded strongly in recent years, as many client businesses have outsourced non-essential systems operations, and as computers and IT systems have required regular upgrades and enhancements. Greater internet connectivity has fuelled industry growth, and financial services providers – including banks and insurers – have remained the industry's largest clients.

In response to robust demand, industry-wide revenue has been growing at an annualised 3.5% over the past five years and... Learn More

7. National and Regional Commercial Banks in Australia

Labor Costs for 2025: $34.7B

Banks are grappling with a transition from years of loose monetary policy to tighter financial conditions. Soaring inflation has prompted an RBA pivot, in the face of surging energy, housing and food prices. The RBA has aggressively hiked the cash rate since May 2022. Prior to this, banks cashed in on high residential housing prices, with low interest rates and government schemes encouraging strong mortgage uptake over the course of the pandemic. APRA also eased the interest rate buffer in 2019, before raising it in 2021. Although a subdued cash rate cut banks' interest incomes, it was more than offset... Learn More

8. Temporary Staff Services in Australia

Labor Costs for 2025: $28.6B

Temporary staff service firms are susceptible to changes in the national unemployment rate, with lower unemployment contributing to greater demand for temporary staff in recent years. Trends towards greater business outsourcing have positively affected industry demand. Stable demand from several downstream markets has benefited industry firms, including professional services and healthcare sectors.

Before the pandemic, industry revenue grew rapidly. The pandemic disrupted the industry, causing revenue to decline slightly in 2019-20 and significantly in 2020-21. Previous strong industry revenue growth was due to falls in the national unemployment rate, which drove demand for temporary staff that industry firms supply. In contrast,... Learn More

9. Private Schools in Australia

Labor Costs for 2025: $22.4B

Strong demand for private education and rising tuition fees have augmented industry revenue over the past five years. Australians value education, and many people believe that private schools deliver higher quality services than public schools. Accordingly, private school enrolments have surged in recent years.

Rising discretionary incomes across the nation in the four years through 2021 have compelled school administrators to consistently hike school fees, and the influx of new enrolments has continued. Profitability and revenue have both benefited as a result. Indeed, despite volatile consumer sentiment in recent years and declining discretionary incomes over the two years through 2022-23, revenue... Learn More

10. Aged Care Residential Services in Australia

Labor Costs for 2025: $21.4B

As Australia's population ages, the need for age-appropriate housing grows. Older individuals are more susceptible to a range of age-related ailments and need more assistance with everyday activities and personal care. The Aged Care Residential Services industry is growing as aged care requirements are changing, and operators now offer different lifestyle accommodation options.

However, a challenging operating environment is limiting growth. Despite government efforts to implement policies to create a more consumer-driven, market-based system, concerns about the quality of care provided by aged care residential providers are currently at the forefront. These concerns follow a series of high-profile cases of abuse,... Learn More